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View Poll Results: Mortgage or Investments
No mortgage pay 350k for house 53 51.96%
Mortgage with money in investments 49 48.04%
Voters: 102. You may not vote on this poll

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Old 09-04-2019, 07:28 AM
 
Location: RVA
2,193 posts, read 1,299,009 times
Reputation: 4559

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Well, IMHO, you can’t have too high a percentage in Roth, unless you know you will never use it. Then let the heirs pay the taxes. I’ve had a mortgage or 2 since 1986. I’ve refied at least 10 times. Its all the same money. I never even think about a downside or lose sleep over it, except to get the next lower rate. My fixed income for life is more than 4 times my P&I. But I understand that not everyone has the same advantages or is comfortable investing. I worked with engineers that paid down/off their mortgage during this bull market and would never consider the investing alternative. I estimate about a $200k lifetime gain by keeping most of it invested during low rates and good market. When I was younger & the rates were high, (pre 1998) and I had little invested, I did make extra principal payments, as it was a sure fire return of 6-9%, and the market sucked. Many still see it that way.
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Old 09-04-2019, 07:32 AM
 
1,089 posts, read 1,134,533 times
Reputation: 1443
They are arguing about this on the investment forum.
Personal real estate vs stocks
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Old 09-04-2019, 09:33 AM
 
1,089 posts, read 1,134,533 times
Reputation: 1443
Quote:
Originally Posted by Perryinva View Post
Well, IMHO, you canít have too high a percentage in Roth, unless you know you will never use it. Then let the heirs pay the taxes. Iíve had a mortgage or 2 since 1986. Iíve refied at least 10 times. Its all the same money. I never even think about a downside or lose sleep over it, except to get the next lower rate. My fixed income for life is more than 4 times my P&I. But I understand that not everyone has the same advantages or is comfortable investing. I worked with engineers that paid down/off their mortgage during this bull market and would never consider the investing alternative. I estimate about a $200k lifetime gain by keeping most of it invested during low rates and good market. When I was younger & the rates were high, (pre 1998) and I had little invested, I did make extra principal payments, as it was a sure fire return of 6-9%, and the market sucked. Many still see it that way.
Your Roth goes to your heirs tax free.
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Old 09-04-2019, 02:42 PM
 
Location: RVA
2,193 posts, read 1,299,009 times
Reputation: 4559
Right. I know. So why pay the taxes to convert tIRA to Roth so they can benefit? So if you have more portfolio than you will ever use (some people just like to own a lot of money and do nothing with it) it would make no sense to convert. However, all assets you plan to use will only benefit you if you can convert most of it while the tax rates are reduced. Saying you have 50% of you portfolio in Roths so you don’t need to convert anymore doesn’t mean much. If you have a $5M portfolio and $2.5M in Roth, then yeah, why pay taxes on the other $2.5M you would likely never use. If you have a $500K portfolio and $250k is Roth, you would benefit by converting as much as possible, as it is quite likely you will need more than $250k. Of course, you are single, so there isn’t AS much benefit, where as married couple where one dies, goes from MFJ filing to the much higher SINGLE filing, so paying off the Roth taxes while MFJ is a huge benefit.
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Old 09-04-2019, 03:07 PM
 
Location: Las Vegas & San Diego
409 posts, read 69,368 times
Reputation: 380
Quote:
Originally Posted by Perryinva View Post
Right. I know. So why pay the taxes to convert tIRA to Roth so they can benefit? So if you have more portfolio than you will ever use (some people just like to own a lot of money and do nothing with it) it would make no sense to convert. However, all assets you plan to use will only benefit you if you can convert most of it while the tax rates are reduced. Saying you have 50% of you portfolio in Roths so you don’t need to convert anymore doesn’t mean much. If you have a $5M portfolio and $2.5M in Roth, then yeah, why pay taxes on the other $2.5M you would likely never use. If you have a $500K portfolio and $250k is Roth, you would benefit by converting as much as possible, as it is quite likely you will need more than $250k. Of course, you are single, so there isn’t AS much benefit, where as married couple where one dies, goes from MFJ filing to the much higher SINGLE filing, so paying off the Roth taxes while MFJ is a huge benefit.
This is one of the biggest reasons to convert IRA to Roth is to not have to take large RMDs without being able to choose the timing, it can push you into much higher tax brackets and higher Medicare Payments, especially if become subject to individual instead of joint rates.
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Old 09-04-2019, 03:09 PM
 
Location: Las Vegas & San Diego
409 posts, read 69,368 times
Reputation: 380
Quote:
Originally Posted by Perryinva View Post
Well, IMHO, you canít have too high a percentage in Roth, unless you know you will never use it. Then let the heirs pay the taxes. Iíve had a mortgage or 2 since 1986. Iíve refied at least 10 times. Its all the same money. I never even think about a downside or lose sleep over it, except to get the next lower rate. My fixed income for life is more than 4 times my P&I. But I understand that not everyone has the same advantages or is comfortable investing. I worked with engineers that paid down/off their mortgage during this bull market and would never consider the investing alternative. I estimate about a $200k lifetime gain by keeping most of it invested during low rates and good market. When I was younger & the rates were high, (pre 1998) and I had little invested, I did make extra principal payments, as it was a sure fire return of 6-9%, and the market sucked. Many still see it that way.
Need to consider RMD and Individual vs Joint tax rates - this may easily make it worth while to convert.
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Old 09-04-2019, 03:42 PM
 
73,227 posts, read 73,030,272 times
Reputation: 50813
Quote:
Originally Posted by ddeemo View Post
Need to consider RMD and Individual vs Joint tax rates - this may easily make it worth while to convert.
this is important ..if the conversions are at a married rate and the rmd's if you don't do conversions are at a single rate that can make converting win
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Old 09-04-2019, 04:33 PM
 
Location: SoCal
14,028 posts, read 6,712,345 times
Reputation: 10692
Why isnít it fair for married people get $170,00? Because itís twice $85,000. It seems fair to me.
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Old 09-05-2019, 12:01 AM
 
Location: Las Vegas & San Diego
409 posts, read 69,368 times
Reputation: 380
Quote:
Originally Posted by NewbieHere View Post
Why isn’t it fair for married people get $170,00? Because it’s twice $85,000. It seems fair to me.
Those figures are for Medicare payments - if someone had taxable income of $165K as married would be at $135.5/mo or $3252 for 2 people for the year but for single at that level would be $433.4/mo - a 320% increase or $5200.8 for 1 person for the year, essentially $1948.80 more a year yet only covering 1 person instead of 2. This could be the situation if RMD forces this. On top of this the single person would also owe more than $8k more in taxes.
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Old 09-05-2019, 02:37 AM
 
73,227 posts, read 73,030,272 times
Reputation: 50813
Quote:
Originally Posted by ddeemo View Post
Those figures are for Medicare payments - if someone had taxable income of $165K as married would be at $135.5/mo or $3252 for 2 people for the year but for single at that level would be $433.4/mo - a 320% increase or $5200.8 for 1 person for the year, essentially $1948.80 more a year yet only covering 1 person instead of 2. This could be the situation if RMD forces this. On top of this the single person would also owe more than $8k more in taxes.
here is the medicare surcharges . the surcharges get added to the base rate of 134.00

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